2022 Begins With Continued Upward Push In Economic Sentiment

Economic sentiment rose again over the past few weeks, the latest positive development in a rally that began in late November of last year. The HPS-Civic Science Economic Sentiment Index (ESI) rose 0.5 points to 42.0.

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Four of the ESI’s five indicators rose over the past two weeks. Rising the most was confidence in personal finances, which rose 2.8 points to 57.9, followed by confidence in the overall U.S. economy, which rose 1.7 points to 40.3. Omicron news dominated the headlines over the past two weeks, generating mixed economic messages. Covid-related hospitalizations rose sharply in cities including New York and a growing list of companies announced they are pushing back plans for in-person work, raising concerns of a further delay in a return to “normal” economic activity. At the same time, however, widely-reported research indicated that Omicron is less likely than previous Covid strains to lead to health complications, particularly amongst vaccinated individuals. Here is how the ESI’s other indicators moved over the past two weeks:

– Confidence in the housing market rose 0.4 points to 28.8

– Confidence in making a major purchase rose 0.1 points to 28.8

– Confidence in finding a new job dropped 2.4 points to 54.4

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The ESI’s three-day moving average began this two-week stretch at 41.1 on December 22. It then rose following the Christmas holiday before quickly dropping to its session low of 40.9 on December 31. The moving average rose to begin the new year, reaching its two-week high of 43.7 on January 3 before closing out the session on January 4 at 41.5.

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The next release of the ESI will be Tuesday, January 18, 2022.